Wednesday, July 1, 2009

Westfield Mall Gets 11% Tax Decrease

The city and its largest taxpayer, Westfield Connecticut Post mall, have struck a deal on its taxes, which will result in the mall paying the city $1.2 million less over the next three years, said Mayor James L. Richetelli Jr.

Westfield appealed its 2007-08 tax assessment. The 1201 Boston Post Road mall was valued by the city to have a full market value of $251 million, but Westfield officials felt the true value was just $151 million.

Assessor Dan Thomas said the mall and the city reached an out-of-court settlement, which is essentially down the middle at $200 million. Sources said if the city had gone to court and lost, then it could have been forced to pay Westfield $2.4 million immediately.

That $2.4 million figure equaled the two years of taxes that they would have had to repay, if the $151 million valuation was upheld. By settling, the city will not have to write the mall a check.

Thomas said over the next three years, Westfield will have a tax credit of $400,000 per year for a total savings of $1.2 million. Westfield pays the city $3.8 million annually in taxes.

Thomas said it’s normal for tax appeals to result in a 10 percent adjustment, and Westfield’s reduction is 11 percent.

“I’m satisfied with the $200 million figure,” Thomas said.

Thomas said since the city has decided to freeze the phase-in of its revaluation over three years, the mall’s assessment is frozen at $125 million.

Richetelli said the tax agreement with Westfield was important to both the mall and the city’s long-term economic future.

“Westfield is our largest taxpayer. It’s vitally important to the community that the mall and retail remain viable,” Richetelli said. “The settlement is fair to both sides. It’s a good compromise.”

Richetelli stressed Westfield did not receive a special deal because it’s the city’s largest taxpayer.

“This avoids a very costly and drawn-out litigation,” Richetelli said. “This protects and enhances the viability of the mall to attract good tenants.”

Richetelli said Westfield’s tax credit will not hurt next year’s budget because the spending plan, which was approved in May, took into effect the $400,000 tax reduction.